Time for Europe to tackle housing crisis, advocates say

The housing crisis is particularly acute in Prague, the Czech capital city. A study by Deloitte recently showed that apartment costs in the Visegrád countries – Czechia, Hungary, Poland and Slovakia – have risen to 12 times the average annual salary. [Yannick Loriot / Flickr]

This article is part of our special report The future of affordable housing.

The coronavirus pandemic has exacerbated existing housing policy issues such as affordability and homelessness. Although European cities and countries implemented some measures to protect tenants, experts say it is time Europe develops some long-term solutions.

Housing prices have been steadily rising since 2011, according to the International Monetary Fund, and things only got worse during the pandemic.

“The pandemic put a spotlight on the housing crisis,” said Kim van Sparrentak, a Dutch lawmaker who authored a report last year “on access to decent and affordable housing for all” on behalf of the Greens group in the European Parliament.

“More and more people can’t afford a decent home from Warsaw to Athens, Dublin to Lisbon. Throughout Europe, housing prices rose 7% last year. In the Netherlands by 16,” she told delegates at the Europe Housing Forum 2021.

The problem is becoming pronounced in former EU communist countries which were once leaders in social housing. A study by Deloitte recently showed that apartment costs in the Visegrád countries – Czechia, Hungary, Poland and Slovakia – have risen to 12 times the average annual salary.

The housing crisis is particularly acute in Prague, the Czech capital city. “We have a big affordability crisis,” said Štepán Ripka from Prague city hall. The reason for this is simple; the city is doesn’t have enough flats. Ripka pointed out that in 1991, after the Velvet Revolution, the city owned over 200,000 apartments. Now it only owns 30,000.

“We are trying to stop privatisation of municipal housing stock, but it is still not yet banned. There are boroughs that still privatise”.

What lockdowns showed us

When the coronavirus pandemic hit in spring 2020, governments introduced measures to slow down the spread of the virus, including orders to stay at home.

For some, this meant staying in overcrowded flats unsuitable for housing while others simply did not have a home to stay in at all.

“Anti-epidemic measures led to one of the most dramatic scenes since the end of World War II, with even the most crowded cities and squares emptied. At the same time, it has been one of the most cynical situations when homeless people or people living in overcrowded places were recommended to stay home,” said Doris Andoni, chair of the United Nation Economic Commission for Europe (UNECE) Committee on Urban Development, Housing and Land Management.

After the pandemic started, homelessness suddenly became a health issue which cities and governments had to solve.

Many of them opted for temporary shelters for the homeless. Some even used free space in hotels. But as Andoni noted, these measures were only temporary. If anything, they highlighted that European societies had not done much to address the issue before the pandemic.

In some cities, housing problems are also caused by the widespread use of apartments as short-term accommodation for tourists.

Even before the pandemic, studies found that services such as Airbnb had adverse effects on housing and rent prices. In Lisbon, for example, many neighbourhoods were more than one-third occupied by short-term housing. In some parts of town, around 55% of residential units had been converted to makeshift hostels and hotels.

Who is to blame

Cities are an essential player in housing policy, yet it is the national ministries in charge of social affairs who are responsible for defining them.

In the Czech Republic, this is where the government failed, Ripka claims. To be fair, he said it wasn’t just the fault of the current or previous government, but rather the constant overlooking of the topic.

Dutch MEP Kim van Sparrentak adds that the European Union has long been absent on housing issues, although its policies have impacted the development of housing prices.

“The Capital Markets Union serves as an accelerator for the financialisation of the housing market,” she said, adding that “European fiscal rules limit the money the government can invest in social housing.”

With its Semester of economic policy coordination, the EU has “a powerful tool to steer the economic and social policies” of EU member states, van Sparrentak said. “Still, the Commission has been recommending for years to shrink the Dutch housing programme,” she added.

Furthermore, she says that authorities have a limited impact because, in contemporary Europe, market forces prevail.

Solutions

“Housing is a human right. This should be a starting point of housing policy,” van Sparrentak continued. This is also the basis of her recent report ‘on access to decent and affordable housing for all’, adopted by the European Parliament in January.

According to the report’s suggestions, the Commission should prepare an integrated strategy on affordable and social housing, allow more public investments, and set affordable housing as a policy goal within the European Semester.

Moreover, the Commission needs to ensure that the upcoming Renovation Wave and inclusion of the building sector in the EU Emissions Trading System does not lead to increased housing costs, the report said.

Cities are also calling upon the Commission to help with short-term rental platforms. In September 2020, mayors of Amsterdam, Barcelona, Berlin, Paris, and others asked the Commission to better regulate digital platforms such as Airbnb.

The Commission, however, can’t solve the housing problem on its own as most of the responsibility still lies on the national government and local municipalities. Prague, for example, wants to buy out office buildings and convert them into housing. Another option is buying out old apartments, as the Slovakian capital, Bratislava, has started to do.

“I think the biggest gap is the recognition that housing can be regulated and that there is such a thing as national housing policy that can be put in place to influence the housing situation. There is no consensus on this matter, and it is missing not only between politicians but in public as well,” Ripka said.

[Edited by Alice Taylor and Frédéric Simon]

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